US airstrikes on Iran leave Hormuz uncertain and US reserves at four-decade lows
China's 1.4 billion-barrel strategic buffer absorbed the Persian Gulf shock; the US SPR's depletion to 1983 levels is setting up a restocking demand wave.
US aircraft struck Iranian targets on July 7 (2026-07-07) after a series of Iranian attacks on vessels transiting the Strait of Hormuz, and Washington suspended a Treasury Department licence authorising Iranian oil sales for sixty days. Tanker traffic through the Strait remained restricted as of July 9 (2026-07-09), with ICE Brent crude front-month quoted at $88.26 per barrel as of Saturday (2026-07-18).7
The disruption exposed a stark divergence in strategic preparedness across the world's largest oil importers. The Hormuz closure stranded more than 10 million barrels per day of crude in the Persian Gulf. But the economic damage landed unevenly, shaped by how much strategic stock each importing nation held when the chokepoint closed.3
China was the most prepared. Beijing holds an estimated 1.2 to 1.4 billion barrels in its strategic petroleum reserve, roughly four months of net crude imports. Around 50 percent of China's imported crude and 36 percent of its total crude supply pass through the Strait of Hormuz annually, according to a CSIS study, as does nearly 30 percent of its imported natural gas. The reserve gave China room to pull back from spot purchases rather than bid aggressively into a tightening market, which moderated the price spike that would otherwise have been steeper.4
The United States had no equivalent cushion. The SPR drained to levels last recorded in 1983 through a combination of prior policy releases and the current crisis. In the week ending Wednesday (2026-06-17), US commercial crude inventories fell 8.3 million barrels, the Energy Information Administration reported, while the SPR dropped a further 8.9 million barrels in the same period. Market analysts flagged those drawdowns as structural price support for the second half of 2026.2,3
The IEA mounted its largest emergency response on record. Member states committed to releasing 400 million barrels from joint emergency reserves, more than double the 182 million barrels mobilised in the agency's previous co-ordinated action, plus additional volume from the US SPR itself. Even so, the supply mathematics remained unfavourable. Assuming Strait flows gradually resumed from June 2026, the IEA projected global oil supply would average 3.9 million barrels per day below the prior year's pace for 2026 as a whole, settling at 102.2 million barrels per day.5,1
The recovery timeline compounds the supply gap. The IEA estimated a minimum of two to three months would be required to re-establish steady export operations after any mine clearance, accounting for the logistics of moving oil-laden tankers out of the Gulf, repositioning ballast tonnage, and restoring port infrastructure. Given that the July 7 (2026-07-07) airstrikes came after a ceasefire period, that countdown has not started.1,7
Japan appears alongside China and the United States in a pre-crisis EIA inventory audit of 2025 strategic stock levels. Japan built substantial reserves over decades, recognising that its position as an advanced economy with negligible domestic crude production left it structurally exposed to exactly this type of chokepoint closure. The Hormuz disruption has tested that logic against real market conditions rather than modelled scenarios.6
The restocking demand that follows any normalisation of Strait flows is a demand driver whose scale most supply forecasts have not yet incorporated. Reuters calculations based on recently announced storage expansion plans across Asia Pacific and beyond suggest filling new capacities could absorb around 500 million barrels of crude and petroleum products. China's trajectory illustrates the potential buying volume: the country imported 11 to 13 million barrels per day of crude in the twelve months before the war. Any sustained reserve replenishment on top of that baseline adds a durable increment to demand, not a transient one. Governments that underbuilt reserves are now revising their risk assessments and allocating capital to address the gap.3,5,1,4
The main risk to that restocking scenario is a faster-than-expected diplomatic resolution combined with a co-ordinated IEA release at suppressed prices, pre-empting private-sector buying before new storage capacity is filled. With the Treasury licence suspension resetting the diplomatic clock to sixty days from July 7 (2026-07-07), that outcome looks unlikely near-term. The US EIA's weekly inventory report is the next concrete datapoint: sustained SPR drawdowns near the pace seen through June (2026-06) would narrow the administration's remaining release capacity, limiting its ability to buffer further price moves driven by physical tightness.7,2,1